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The bourse, the buck, the Bundesbank, and G-7.

The U.S. isn't the only nation undergoing difficult economic times. Nations throughout the world are beginning to feel the same kind of economic slide. The downsized Paris Club -- officially the Group of Seven (France, Italy, Japan, Germany, Canada, United Kingdom, and the United States) -- expected their markets to be affected by the financial turbulence being felt throughout the world. And sure enough, the global bourse is taking substantial market hits--even the staunchly independent Bundesbank, which refused to lower interest rates in an effort to slow the pace of the weakening U.S. dollar, may find itself being mandated to slash interest rates. Earlier this year, the only nation in the G-7 to defy aiding this effort by lowering interest rates was Germany's Bundesbank. |Granted, Japan and the other G-7 nations were already on the brink of or entrenched in slowing economies.~ In response to the request to lower interest rates, the Gibraltar-like financial institution hiked its discount rate to 8-3/4%, which represents a 60-year high.

The purpose of the Group of Seven is to coordinate monetary and fiscal policies in an effort to maintain a stable world economy--the effort is to be a harmonious one. Working multi-nationally in an attempt to maintain a stable world economy is a wonderful notion -- but is it nothing more than a pipe dream? Now G-7 finds itself galvanized by falling bourses and stemmed cash flows. Perhaps this common ground will aid in instituting an attempt to stabilize the economic state of the world.

We talk about global markets and the global marketplace, but as a network of nations there may be too much self-interest to function under the dictates of a group such as G-7.

We need a stable monetary and fiscal world economic system if we are to function as a global market. The Group of Seven is supposed to work much like a committee for the common good of world economy. |Admittedly, if the U.S. were not in such a negative state of financial affairs, perhaps I would not be writing such an editorial; the mirror of reality humbles the soul.~

The notion of a global market requires a harmonious effort. If we are going to work together in reaching G-7's objective, it had better begin at the source. For if it doesn't, there is little hope that stabilizing the world economy will ever become more than a futilitarian effort. Turning prospect into reality is no doubt a rather tough go of it--but if it can be done, the possibilities for growth and technology are without limit; and the notion of world peace may become somewhat more of a possibility.
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Title Annotation:coordination of international monetary and fiscal policies by the Group of Seven industrial nations
Author:Ferris, Roger M.
Publication:Plastics Engineering
Article Type:Editorial
Date:Sep 1, 1992
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